We have any insurance company as an affiliate. In the new insurance disclosures(effective Oct 1)the first form states that the customer's credit decision will not be affected by them purchasing insurance. Does the insurance company need to use this one also? I know they must use the second form. Also, if they must use the first form, can it say that any current credit decisions or future credit decisions will not be conditioned upon them purchasing this insurance product? The ins. co. is having a problem with using this form. Rightfully so, but I am not clear enough on the reg. to say that they do not have to use it or that we can change the wording. any suggestions? Thanks so much for your help.

Is your affiliate selling insurance "at the bank" or "on behalf of the bank"?

We have a subsidiary insurance company, however they do not sell "at the bank" nor do they sell "on behalf of the bank" so we do not have to worry about the additional disclosures in this case.

I hope that helps!

We have an agent in each branch but we also have agents that work in the offsite location of the insurance company. I do not believe the insurance sold is on behalf of the bank, but since it all falls under the same corporation, the bank would ultimately be benefiting from it also. Correct? Any guidance is greatly appreciated.

If an insurance product is being sold on bank premises, it is definitely covered. Insurance sold at your offsite locations may also be covered if it meets one of the other prongs of the "on behalf of" test.

You don't indicate what type of insurance is being sold, but you should look at your loan application and solicitation procedures and determine if you are soliciting before or after the credit decision is being communicated. If it's before, then you have to give the credit disclosures.

Either your insurance affiliate or the bank can give the disclosures; however, as a practical matter, the bank may be the only one in a position to give disclosures at the time of application if an insurance product is sold in connection with a credit transaction. Good luck.

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The opinions expressed are mine and not those of my employer